1. Look at the entire portfolio to be viable in the long term

Alexander Lowry is a professor of finance at Gordon College and Director of the University's Master of Science program in Financial Analysis. This advice is he recommends, which means that investors should consider the overall portfolio, not just focus on a single portfolio.


He shared that individual stock selection is not really important in the long term, but what is important is the decisions of asset allocation. On the other hand, most individual investors do not spend any time or effort managing asset allocation. They often invest entirely in private stocks. Most individual investors do not even know how to buy bonds and how to determine the volume of their positions, two key components of an investment decision.

In short, his idea is never to put eggs in a basket, you will not depend on a portfolio, limit the risk of big fluctuations happens.

2. Use stop loss

Nate Masterson has been a Freelance Finance Advisor since 2011 and is currently the Marketing Director of Maple Holistics. He recommends using stop losses to limit risk. Specifically: If using stop-loss orders properly, traders will avoid a lot of big risks from wrong or ineffective strategies.


Stop-loss should be based on the price range you must accept the stop loss according to the trading rules and the amount they accept the risk to calculate the volume or amount they need to bet on this trade. Stop losses should become a core part of your risk management strategy.

3. Move the stop loss to protect profits

Marc Lichtenfeld is the Oxford Club strategy director, the editor-in-chief of the Oxford Income Letter, and author of two Amazon bestsellers: Get Rich with Dividends and You Don at Having to Drive an Uber in Retirement. He shared that it is advisable to lose less than 4% on a trading strategy and shift the stop loss at price when the opportunity arises.


In addition, he also recommends exiting the stop-loss order every time the price reaches a new high and, this stop needs to exit at strong confirmation signals.

4. Determine your trading volume correctly to minimize your risk

Trading volume is an important component of a trader's risk management strategy. If used correctly, selling not only avoids a large account decline, maintains profits, but also has a more stable mentality - Alexander Lowry shared.

Most traders lose money not because the trading is too much also because the trading is too big. And it all has to do with the volume of transactions.

This is what determines how much money the trader will lose to the market. So the balance of trading volume is the consideration of how much risk you accept when performing a trade.